Trading Activity

Activity this morning:

Mattel $MAT  Bought the Dip on the pre-lim guidance & CEO departure news. After selling the stock I initiated a Long February 26/28/25 RRCS for a small debit. I have since StC the Long $26 Calls leaving a Short 28/25 Strangle for February. I have set a Buy Stop at $27.90 (would be a hedge)

Bed Bath & Beyond $BBBY  I have adjusted the Long Feb Puts up to the $75 strike (Submarine Basket)

United Parcel $UPS  I have added Short Stock at $102.06 (downgrade news in P/M, this is a hedge, Submarine Basket). I have StC the February 06 weekly $103 Calls for .88 credit thus leaving me with Short $103 Puts for the same expiry

Netflix $NFLX  I have adjusted the Short Calls (covered) to the September $420 strike for a credit. Options Net improves to: $5.20


RRCS = Risk Reversal Call Spread
StC = Sell to Close

- DM 10:00 AM CST


Taking stock in trades

I have made a few comments via Social Media this week regarding my plans to “take stock” in a few trades. There are certainly a few paths to take when you are Long Calls that are ITM (in the money) including rolling out to a future expiration but I have elected to let the Long Calls auto-exercise in:

The key reason for this is that I have a LOT of cash available (large % of my trades are Options only which takes a LOT less capital) so I find it easier to take this approach versus trying to roll out to future expiration’s (and likely give up a % of gains that I am not willing to).

Here are the specifics on my plans to expiry this week:

$CF  I will take stock at $280

$NFLX  I will take stock at $345

$UNP  I will take stock at $113

Worth noting that there is Short Call premium sold on each of these 3 positions (in future expiration’s) so they will become normal Covered Call positions.


- DM 11:00 AM CST


Trading Activity

Most of my focus has been on tending to existing positions that have January monthly Options as part of the trade. I do have 1 new position today for the long-term account:

Precision Castparts $PCP  I own a March 200/220/180 RRCS. Options Net: $1.45


- DM 12:40 PM CST


January Options expiration – monthly


I have finished up my prep for the January Options expiration that occurs this week. Here are the positions with January monthly options that I will need to tend to (note: some of the positions have Options in other expiration’s as well):

$UVXY  I am short the $25 Calls (covered, portfolio hedge)

$WYNN  I am short the $140 Puts

$AVGO  I am short the 150/110 2×1 Call Ratio and Long stock at $104 (2x size, hedge)

$EA  I am Long the 45/40 Put Spread (protects a Long stock position, part of a Collar PS)

$WBA  I am Long the 75/72.5 1×2 Put Ratio (protects a Long stock position, part of a Collar Put Ratio)

$ACHN  I am Long the 12.5/20 CS

$AGCO  I own a 45/45/40 Collar PS

$DNKN  I am Short the $40 Puts

$FDX  I am Short the $170 Puts

$AYI  I am Short the 150/130 Strangle

$BMRN  I am Short the $95 Calls (covered)

$PEP  I am Long the  90/95 CS (some clients)

$SWK  I am Short the $95 Calls (covered)

$XRT  I am Short the $95 Calls (covered)

$HD  I am Long the 90/95 CS (some clients)


- DM 10:30 AM CST



Trading Activity

Personal Accounts:

Agco Corp $AGCO  I have StO the January $45 Calls so now have a 45/45/40 Collar PS. Options Net improves to $1.43 (Submarine Basket)

FedEX $FDX  I have StO the January 175 Calls so now have a 170/175/170 RRCS. Options Net improves to $2.68 (Submarine Basket)


I have exited an $EXPE position for some clients today



StO = Sell to Open

RRCS = Risk Reversal Call Spread (Long a Call Spread, Short Puts)

PS = Put Spread


- DM 11:05 AM CST

The Gap Fill starring Conn’s Inc

One of the common trades that I like to participate in is a Gap Fill trade – especially after a flush in price. Here are a few Daily charts on $CONN that gives some perspective on what price has done since the summer – and what I’d like it to do now for a new trade:


The first target is certainly near the $24 level where the Gap Fill area begins (see chart #1).

- DM 10:30 AM CST